Case Law Details
ACIT Vs Himanshu Jayanti Lal Kamdar (ITAT Ahmedabad)
The central controversy involved in the present case is towards determination of total cost of acquisition of new house for the purposes of claim of deduction under s.54F of the Act while computing LTCG on sale of plot. The assessee has also included the cost incurred towards vacating the new property from tenant amounting to Rs.35 Lakhs as well as certain costs incurred towards repairs and renovation of the new house as part of cost of acquisition of new house in addition to original cost incurred for its purchase. The original cost of acquisition of the new house was thus increased by the assessee towards cost of removal of encumbrances and cost of repairs and renovation of new house.
As regards the cost of removal of encumbrances, we straightway find ourselves in complete agreement with the observations made by the CIT(A) dealing with issue. The CIT(A) has objectively analyzed the facts existing in the case with reference to the abandonment of tenancy right as noted in earlier paras and has come to the rightful conclusion in the given set of facts. As pointed out, the purchase agreement itself specifies the existence of encumbrance. As further noted, the assessee has also demonstrated that the original cost of acquisition was quite lower vis-à-vis fair market value having regard to the embedded encumbrance. Suffice it to say, that the CIT(A) has drawn conclusions in favour of the assessee based on tell-tale evidences. Therefore, we do not see any reason to upset such conclusions of CIT(A). The order of the CIT(A) is thus well founded with regard to the cost incurred for removal of the tenancy rights. The objection of the Revenue on this score thus cannot be sustained and hence dismissed.
FULL TEXT OF THE ITAT JUDGEMENT
The captioned appeal has been filed at the instance of the Revenue against the order of the CIT(A)-5, Ahmedabad (‘CIT(A)’ in short), dated 29.01.2015 arising in the assessment order dated 11.03.2013 passed by the Assessing Officer (AO) u/s.143(3) of the Income Tax Act, 1961; (the Act) concerning assessment year 2010-11.
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